World Stocks Fall On Drop In US Consumer Spending

The strength of consumers is considered vital to a recovery because their spending accounts for more than two-thirds of all U.S. economic activity. Without government incentives and stimulus programs, it is widely expected consumer spending will have to rise significantly to extend the economic recovery.

Meanwhile, retail sales fell 0.5 percent during September in Europe's largest economy, Germany's Federal Statistical Office reported.

Earlier, Asian stock markets snapped three days of losses following Thursday's report that U.S. gross domestic product rose in the third quarter, spurring hopes of improved demand for the region's exports. Major benchmarks from Tokyo to Sydney gained 1.5 percent while a few markets failed to hold their gains and ended slightly down.

On Wall Street, Thursday's GDP data reinvigorated investors who had dumped stocks for much of the week on signs of a slowing U.S. housing market and weak consumer confidence.

The Dow Jones industrial average had its best day since July 15, rising 199.89 points, or 2.1 percent, to 9,962.58, although that gain was wiped out Friday.

"From the mid to end of this week we have almost jumped back to 12 months ago when we had this intense volatility in the markets," said James Hughes, market analyst at CMC Markets.